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Goa takes the bridge to high growth
By Manojit Saha
Goa, whose economy has largely suffered due to the withdrawal of tax holidays in the past, is taking fresh guard to seize the initiative of the 'feel good' factor prevailing in the country. As Yatin Kakodkar, Chairman, CII Goa Council, affirms, "The most important factors that have contributed to industrialisation in Goa in the 1980s and 1990s have been income tax and sales tax holidays. Since these have been withdrawn, investment in Goa has slowed down. Further, new investment is going to states like Uttaranchal and Himachal Pradesh, which have very attractive financial incentives."
With the unveiling of the Industrial Policy 2003, the Manohar Parrikar government has declared various incentives for setting up new industries. "Goa is going to be a pharmaceutical hub very soon. The other thrust areas are food processing and agro-based industries, IT and IT enabled services and biotechnology," Ram Rao Desai, state Minister for Industries and Commerce, says. With per capita income one of the highest in the country and a literacy rate of more than 82 per cent, Desai's ambition is to make Goa a model state.
Equally, with a high English speaking population at its disposal it is surprising why the state hasn't benefited from the BPO boom. Kakodkar explains, "Government should improve the infrastructure for attracting BPO. Unfortunately, this has not been done till date. Educational facilities for IT studies are very limited. The number of IT students is very small; this is a barrier to developing ITES sector in Goa."
The government is slowly but surely waking up to the new reality-and with a long-term vision too. "The government is giving free computers to 11th standard students to accelerate IT literacy (contrast this with the initiatives of other political parties like provision of rice at Rs 2 per kg) among Goa's population in a sustainable way," says Industry Minister Desai. In addition, quality of power supply is not likely to create problems for the BPO industry since the state now enjoys a surplus with the availability of 320 mw of power against a peak demand of 270 mw. Also, the state has entered into an agreement with Power Trading Corporation which allows it to sell the surplus power.
According to ProjectsToday, projects investment in the state grew by 23 per cent till December 2002 and 15 per cent till date, far above the national growth rate of 8 per cent. The state government accounts for 30.89 per cent of the total investments in 27 projects and the Central government contributes a whopping 49.07 per cent in 16 projects. The governments account for a combined projects investment of Rs 5,672 crore. In the private sector, Dempo Group's Goa Carbon is investing Rs 400 crore in a finished steel project. Substantial investments are also being made in transport projects such as Rs 1,650 crore for aviation infrastructure and Rs 318.83 crore for road sector.
There is good news from the tourism sector as well. The state, which was hit hard post 9/11 and the consequent global instability, is all set to reap rich dividends with industry looking up. With the International Film Festival of India finding a permanent destination in Goa, it is deemed to attract tourists from all over the world. As Kakodkar comments, "CII has played a pivotal role in bringing the festival to Goa. This event will give a big boost to tourism in the state."
Chief Minister Parrikar has shown that he really means business by accepting Konkan Railway's controversial Sky Bus project, arguably the first of its kind in the world. "It will also become a tourist attraction," Desai points out.
Goa takes the bridge to high growth
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